Builders are seeing a surge in demand for ready-to-move-in properties because such apartments with occupancy certificates are not within the ambit of Goods and Services Tax, which has raised overall taxes on property.

An under-construction project attracts a flat GST rate of 12%. In the pre-GST era, the total tax — including VAT, service tax, Swachh Bharat cess and Krishi Kalyan cess — roughly worked out to 9% of the total sale value (cost of land and construction).

According to a recent report, for ready-to-move-in properties, customers need to pay only the registration and stamp duty charges over the sale value. “Queries for ready-to-move-in properties 12 months ago comprised roughly 25% of the overall enquiries, but only 16% of the overall sales. Now, the figure has increased to 25% of the overall monthly moving average sales. The Buyers who had postponed their decisions in the run-up to GST and the Real Estate Regulation Act (RERA) have returned to the market. The builder has set up a dedicated team to sell ready-to-move-in projects. Usually, ready-to-move-in as an asset class constitutes a small portion of the total revenue for developers as 75%-80% of a project gets sold between launch and completion.

Experts believe that restricted supply of fresh projects after the implementation of RERA has also contributed to the growth in demand for ready-to-move-in houses. Builders are stuck with old inventory and are keen to sell it off before launching new projects.
Under RERA, many developers may move to a format where they would complete the project and then come to market to sell it, in order to minimize risks.

Highway developers would now be rated by the Quality Control India (QCI) based on their performance. Their ratings, which will be dynamic, will be put in public domain.
The idea of giving this task to engage a third party is aimed at ensuring unbiased ratings of the highway builders and developers.

The rankings will be done primarily taking into account the milestones that developers reach for each work awarded to them. If they miss the targets despite having all the clearances and land availability, then their rankings will be low. The contractors can also update their details, which will be verified and will be reflected in the changed rankings.
These rankings will also set the ground for restricting National Highways Authority of India or any other central government agency under the ministry to award any fresh work until the companies improve their performance and achieve milestones.

This is being seen as a better solution than blanket blacklisting or barring highway developers from bidding in new projects.

A few projects awarded under build operate and transfer (BOT) are moving at a snail’s pace and these remain major concerns for NHAI and highways ministry. In the past three years, more projects have been awarded under Engineering Procurement Construction (EPC) model where government foots the entire bill and private players have no risk.

A recent study report of CREDAI, the real estate Developer’s body, revealed that the supply of affordable houses has increased by 27%. What is the factor that contributed towards this sector of housing? The answer is that the initiatives of the government, to boost its flagship programme, has lured many developers to offer its services to lower income and middle income group. Among the new launches, the Mumbai topped the list with a whopping 40% increase in housing supply, followed by Kolkatta and Pune. Mumbai witnessed the highest number of launches, at over 19400 new residential houses until September 2017, out of which affordable housing sector had a share of close to 10000 units registering a rise of 300%, when compared to the previous year. What is the reason for this enhanced growth rate in the affordable housing sector? The key to this is that the implementation of RERA and GST has boosted the confidence of home-buyers, who were swinging in a dilemma to buy a house. The enhanced confidence resulted in many enquiries for the right kind of properties in which witnessed good traction during the current festive season. So would we see more developers investing in this sector?

Central Mumbai where Elphinstone Road station is located, has been a goldmine for builders after the state opened up its erstwhile textile mill enclave for development a decade ago. The unabated construction spree in the Lower Parel-Elphinstone Road belt has choked the neighbourhood, attracting several lakh people every day and putting unbearable pressure on the two railway stations.

Real estate experts state that the total office space here was less than 30 lakh sq ft in 2005. But due to the state government’s liberal policies, it increased to 55 lakh sq ft by 2010 and crossed 1.3 crore sq ft by 2015. Around 11 million sq ft of office space is already occupied in the mill belt and surrounding areas, wherein a lot of retail, malls and food chains has attracted a huge floating population every day. The character of the area has suddenly changed from an industrial belt into a sought-after business district and high-end housing. The total office space is predicted to increase to 1.6 crore sq ft by 2021

Like every other case, any development comes with a pitfall. Similarly, due to wrong urban policies of the state which allowed higher FSI in the mill land belt for commercial development has led to a chaotic situation, wherein there are many a foot falls. In 2007, the state government granted builders permission to set up IT parks in this belt. IT parks have a much higher FSI (2.66) than the regular FSI of 1.33. This allowed many builders to construct more buildable area on their plots. Some builders misused this IT park FSI and sold or leased out space to banks and financial services firms, wherein many of the commercial towers have no IT-related activity.

Another controversial policy was where builders got to construct much more if they built a public parking tower free for Brihanmumbai Municipal Corporation, wherein the civic infrastructure could not handle the rashness caused due to construction. The BMC had not invested in creating public spaces and widening roads even as private space has increased. Would the tragedy serve as a “wakeup call” for planners, administration, realty sector and politicians?

The RERA regulation, mandates that every project, which is above 500 square meters or having 8 units, have to be compulsorily and mandatorily registered, in order to advertise the same in any portal. Any project so advertised, would be penalised. Even, for a buyer to obtain loans from Banks, whilst purchasing properties, it is mandatory to quote RERA registration number, or else, the application would be rejected. Considering such factors, it is necessary for every prospective buyer to view the RERA website, in order to arrive at a right decision. What are the information, that would be available to a prospective buyer, in a RERA regulatory authority’s website? They are:

What projects, are available in a particular area or vicinity, i.e. in which area, the prospective buyer decides to invest in, the projects available in those places. Once, the aforesaid option is selected, the entire list of registered projects in the selected area would be displayed.

Details of the Developers of the particular project, so selected would be provided. A prospective buyer can view the pertinent details of the project such as name of the developer along with his address, track record in the market.

In case, a prospective buyer is interested in investing in an under constructed project, it is pertinent to note how many units have been booked and how many are remaining. This information, would be available in the RERA regulator’s website, which would help the prospective home buyer to invest in the right property. This also eliminates the risk of the person being duped by fly by night real estate agents.

A Prospective buyer, can also ascertain from the Regulator’s website, the details of the Developer’s project in the vicinity that he is interested in investing.

A Prospective buyer, can also have an access to complete set of documents relating to the approved plan, building layout, occupancy certificate, carpet area and a clear title, before investing in the particular project.

A Prospective buyer can also have access to sale and resale value of a project, if it is registered with the regulator

A prospective buyer can also check the financial status of a Developer, and can have access to vital information such as the promoters, financiers and lenders to a project.

A prospective buyer can also find out the names of the Real Estate Agents, who are authorised to deal with the particular projects, since the registration of an Agent, has become mandatory.

Would all these factors, solve the issues and dilemma faced by the home – buyers regarding their investment in residential sector? How about the haphazard implementation by various state government? Would the Portals, reveal all the information or is it going to be merely on paper rather than ground?

Whilst, Maharashtra is the only state in India, which has refused to extend deadlines for registration, many other states are now extending timelines for registration, whilst some states have not yet notified their RERA rules. The state of Goa, has not yet notified its draft rules and has extended registration till October. The State of Telangana is keen to extend the registration deadline to the next two or three months. The state of UP, had extended deadline upto 15th of August. The Haryana state, is also considering the same, courtesy, the requests from the Developers. Isn’t the extensions, granted by the state for registration under RERA rules, a violation of Section 3(1) of the Central Act, given that it does not mandate extensions by three months? RERA being a Central act passed by the Parliament, its dilution or change in the provisions a violation of the Central Act? Why is central government silent? Why no actions are taken against erring states?

The RERA Act was enacted by the Union Government to bring in much needed transparency in the then unorganised real estate industry. The main objective of this enactment was to protect the buyers who had invested their time and money in the purchase of Properties. The buyers being the most vulnerable group needed protection from the dubious developers and builders, and hence with a view to protect them and to bring the Developers under the scanner, whereby they would be made accountable for their actions. But the Haryana state, in a bid to support the Developer had twisted the whole concept of the Central RERA Act, where it was mandatory for the developers to obtain a Completion Certificate to notify the buyers that the property is completed in all aspects, license is obtained and is perfectly ready for occupation and in habitation, along with the government records. However, the Haryana Govt., has completely done away with the concept of completion certificate by introducing Occupancy Certificate. An occupancy certificate would merely state that a particular tower or block is constructed according to building plan, an NOC from fire department is given along with lift and electricity. However, this was not envisaged as per RERA. Many developers may use this to escape of their liability. Is this right? Are the buyers going to take this down? The answer is no. Many of the buyers are moving to National Consumer Redressal Forums against the aforesaid dilution. Would this resolve their issue? Would the Developers go scot free, when the Government does not differentiate between a Completion Certificate or an Occupation Certificate?